Set up in 1999, the ECB, based in Frankfurt in Germany, has responsibility for monetary policy for countries that have joined the euro.

In practice this means that it sets a single interest rate for all those countries - a key objection of British eurosceptics.

Interest rates are the most powerful instrument available to the Bank of England to control inflation, and an interest rate appropriate to Greece's economy may not be appropriate for Britain. Hence the need for economic convergence between Britain and the eurozone.

National central banks, like the German Bundesbank, continue to exist and, together with the ECB, form the European system of central banks.

They are responsible for the day-to-day running of the eurozone financial system, ensuring liquidity in the financial markets and regulating the money market in line with ECB policy. It is a system similar to the decentralised Federal Reserve operations in the US.